* * * *
8/27/2017 Investment House Daily
* * * *
Thank you for bearing with us in this trying time with the Texas storm.
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: GOOG
Stop alerts: None issued
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Friday maintains the status quo but of course that leaves the stock
indices still split heading into this week.
- NASDAQ, SOX, DJ30 still solid upside. SP500, RUTX, SP400still struggling.
Hello everyone! Apologies for the delayed report -- things got a bit wet
down here, and preparing for the event stole away a lot of our time last
week as well. Right now we are watching almost horizontal rain -- still!
And forecasts are for 15" to 20" through Wednesday. Hey, it rained 15" in
just over 3 hours last night. Spread out over 3 days, that now seems like a
cakewalk. At least it lets the water drain some in between the squalls.
Finding those silver linings.
Friday's silver lining for the stock market was it did not collapse. A rise
in futures failed to result in a new break higher, but the market also
avoided the sharp declines experienced late week the prior two weeks. So,
not falling was a win. High praise indeed!
SP500 4.08, 0.17%
NASDAQ -5.69, -0.09%
DJ30 30.27, 0.14%
SP400 7.50, 0.44%
SOX -5.44, -0.50%
RUTX 0.26%
VOLUME: NYSE -8%, NASDAQ -11%. Volume fell farther below average in a week
of very anemic trade. NYSE well below average, NASDAQ way below average as
well. No volume either way as the market closes the week noncommittal.
ADVANCE/DECLINE: NYSE 2.1:1, NASDAQ 1.5:1.
Cohn said Friday there would be tax reform before year end and that the
Administration would start a push this coming week. Futures jumped on the
news, but staying power was so-so at best.
Durable Goods orders were not bad once you took out Boeing. Of course, if
you take out defense spending Durables were -7.85 versus -6.8% overall. At
least business investment rose 0.4%, the third highest of the year.
The news helped, didn't hurt, didn't do much for the market in the end.
After the session, the stock indices remain in their same patterns, some
quite nice, some quite worrisome.
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
NASDAQ continues its rather solid 5 week consolidation of its last high,
holding the early week bounce up to the 50 day MA's. Not selling, working
on a positive pattern, not bad action.
DJ30 bounced from the 50 day MA early week, then spent the rest of the week
testing laterally. Still a pretty solid ACBD pattern here as well, making
the first bounce, and now after this test it needs to show a new break
higher in the pattern.
SOX faded Friday, but is holding the 50 day MA, trying to put in a higher
low at that important point to try to make the break higher. Important
index for next week.
SP500 made a big recovery Tuesday off the prior sharp selloff. After that,
however, SP500 stalled out and then moved laterally the rest of the week.
That closed it below the 50 day MA's, and the 2017 trendline. Precarious
position for the large caps.
SP400 still shows the bear flag despite moving higher Friday. After the
selloff, SP500 gapped higher Tuesday, rallying to the 200 day SMA. That
slammed the door shut on the rebound, however, and indeed a Friday move
higher through the 200 day MA was pushed back to close below that level.
Yes it enjoyed a gain, but it could not hold a break over that important
level.
RUTX shows very similar action, posting a Friday gain but also a doji below
the 200 day MA. This after a week of recovering from the prior sharp
Thursday selloff.
SUMMARY: Three indices working on some pretty darn decent upside patterns.
Three indices still unable to recover with any strength, and are also in
real danger of breaking back lower. Which one takes charge is STILL the
question for this upcoming week.
MARKET STATS
DJ30
Stats: +30.27 points (+0.14%) to close at 21813.67
Nasdaq
Stats: -5.68 points (-0.09%) to close at 6265.64
Volume: 1.44B (-10.56%)
Up Volume: 746.12M (-156.83M)
Down Volume: 650.23M (-36.36M)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 1.47 to 1
New Highs: 79 (+16)
New Lows: 33 (-12)
S&P
Stats: +4.08 points (+0.17%) to close at 2443.05
NYSE Volume: 663.3M (-7.72%)
A/D and Hi/Lo: Advancers led 2.07 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 110 (+13)
New Lows: 18 (-17)
MONDAY
Still some great index patterns, still some sucking on the tailpipe. Still
some great leaders, just not a mass of leaders across the market. Some of
the weaker patterns became oversold then rebounded last week. Retailers
enjoyed some good moves after their long selloffs. Some potential
recoveries, some potential rollovers. Same position as the week before,
just older and wiser right?
That still leaves stocks such as NVDA, SOHU, DATA, NFLX, ACAD and others in
position to make a new move higher.
Looking at SDS again, the upside play on a downside SPY move, because it is
in a position to move higher as SPY moves lower. IWM? Looks like a
classic bear flag: after a violent selloff through the prior Thursday, IWM
has had its rebound to test the 200 day SMA break.
With the market still not coming together with either the good index
patterns pulling the weaker indices higher or vice versa, look at both sides
of the ledger and play the moves that are solid moves.
Hopefully the rain that won't stop will stop, at least maybe 'falling'
horizontally. Whether it does or not, however, the market will open Monday
and perhaps this week will show the break from the patterns.
End part 1 of 3
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
Sunday, August 27, 2017
Saturday, August 19, 2017
The Daily, Part 1 of 3, 8-19-17
* * * *
8/19/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: SDS
Trailing stops: JWN
Stop alerts: JD
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- A Thursday and Friday repeat of the prior week.
- A double drop starts changing the market's MO
- NASDAQ, SOX still working on good patterns. DJ30 in a nice ABCD
consolidation.
- Some say Friday was a key, but for this market, Monday and Tuesday and
whether a rebound emerges is very important.
A repeat of the prior week, just a bit lower. Two weeks back the market
dropped Tuesday to Thursday with Thursday a big drop, then a modest Friday
recovery. That was followed by a bounce.
This past week, after a solid Monday, the stock indices struggled, then
dropped hard Thursday. A modest session Friday, indeed a doji on SP500 just
as on the prior Friday.
SP500 -4.45, -0.18%
NASDAQ -5.38, -0.09%
DJ30 -76.22, -0.35%
SP400 -0.23%
RUTX -0.08%
SOX 0.20%
VOLUME: NYSE +18%; NASDAQ -3%. Expiration saw NYSE volume finally break
average. With SP500 showing a doji after a dump, perhaps this volume
forecasts a rebound. Again. NASDAQ volume held solid at average as the
index shows a doji at the prior week's low. Not bad at all.
ADVANCE/DECLINE: NYSE 1.2:1; NASDAQ 1.1:1.
Now, do they bounce this coming week, repeating the process?
It is true that this is a double drop, not just one sharp drop that then
leads to a new high as seen again and again in this rally, but a sharp drop,
a bounce, then another sharp drop. That is a change in the MO of these
moves in the uptrend and is ugly enough to break the pattern of dip buying.
It was enough of a change for Mr. Gartman to predict Friday could be the
most important day for the markets in the bull run. Why? A market closing
a week at multiweek lows is often a failing market.
A decent argument based in technical analysis, but I would suggest that
Monday and/or Tuesday are more important. Reason: Indeed this pattern has
shown itself many times in this rally, and after the initial selloff then
pause to end a week, the rallies renewed early the next week. Thus, how the
market fares Monday and Tuesday likely tells much more than Friday.
All speculation about the most important day aside, NASDAQ and SOX remain in
quite decent patterns in terms of holding their trends and forming some good
bases. After two hard days of selling, to still be in the pattern is a
positive, using the selling to wring out the weak hands that ultimately sets
up the demand outstripping supply and a new break higher. That is the
theory, and if SP500 along with SP400 and RUTX were not struggling, you
would anticipate they would keep on working through the pattern and make a
new upside break. As it is, you have once again a bifurcated market, and we
saw how they started coming together last time: the large caps tried to
catch down to the small and midcaps. They never got together that time, not
really close. But, they tried to rally, stalled, sold hard Thursday. Do
they come together this time?
There are still good stocks as well. AMAT is setting up a nice pattern and
LRCX' pattern is similar. China stocks turned a bit squirrely on the week
but finished quite well. AAPL and FB in FAANG remain decent. Software
remains strong, e.g. DATA, GLUU, TTWO, VMW. On the flip, some leaders and
those setting up broke, e.g. machinery, financial, and some strong stocks
such as HON are starting to crack. Then you have consumer stocks such as
PG, CLX looking better along with utilities. Oh, that is great -- stocks
that launched many a dull market.
Will the algorithms buy those stocks, just rotate from other groups as in
the past? Doubt it. At least not only those stocks. NASDAQ and SOX are
still in good patterns while RUTX, SP400 are anchor chains. Again, that
puts NASDAQ and SOX in focus and, surprise, puts market performance
paramount on Monday and Tuesday.
THE MARKET
CHARTS
SOX: SOX continues working on its 3 month triangle pattern, closing the
week just below the 50 day MA. That leaves SOX working in the pattern and
still, despite the selling, leaving it in position to finish the job and
breakout.
NASDAQ: Showing a doji over the 2016 trendline, holding at the prior week's
low and the 61% Fibonacci retracement. That has NASDAQ showing a double
bottom at that retracement, and that pattern at that level is a good rally
point. Compare to the action May to early July: Rally, double bottom at the
61%/78% Fibonacci retracement, then a rally to a new high.
DJ30: Yes DJ30 sold off Thursday with the market, Friday as well. This all
inside the July to August run to a new high. DJ30 has stair-stepped back to
the 50 day MA's and the 78% Fibonacci retracement. That, despite the
selling, puts DJ30 in great position to rebound again.
SP500: Broke the 2016 trendline Thursday, sold farther Friday, showing a
doji -- just as the prior Friday. Of all the large cap indices, SP500 shows
the most Gartman-like concern: new low to end the week after a new low the
prior week. We went ahead and picked up a partial downside position on
SP500 to end the week.
SP400: After bouncing off the 200 day SMA the prior Friday and Monday,
SP400 rolled over and suffered another Thursday thumping. That selling took
SP500 through the 200 day SMA. Friday a gap lower, but showing a doji.
Similar to SP500, SP400 fits the lower weekly close in a series of lower
weekly closes.
RUTX: Same action as SP400, just sharper. Held the 200 day the prior week,
bounced, rolled back over and crashed the 200 day Thursday. A big selloff
Friday with a gap lower, but recovering off the low to a doji with tail. On
the Friday low it tested the May and some of the April lows. RUTX is in a
range where it can find support to bounce. It likely attempts a recovery
early week, stalls at the 200 day, then heads down to test the January,
March, April lows.
LEADERSHIP
Some areas losing bids, others holding up well enough.
Semiconductors: AMAT and LRCX somewhat reflect the SOX and its triangle
pattern. AMAT posted earnings Friday and they were good enough to keep it
working on the pattern. MCHP lost some luster but still holding the 50 day
in a decent pattern. SLAB is setting up decently as is ON, BRKS. AVGO is
testing and holding the 50 day MA in a 3 month consolidation. QRVO
struggled some to end the week but is holding the 50 day. Many are at best
'mushy': AMD, XLNX, MU.
China stocks: Turned choppy the past two weeks but held on and some good
moves to end the week. BABA gapped on earnings, added more Friday. BIDU
tested, but is setting up well at the 20 day EMA. HTHT, BZUN enjoyed strong
weeks again. SOHU is set up very well to break higher. SINA looks solid
still. YY recovering from a gap lower on earnings. BITA looks good to go.
Not all is great. JD broke lower, NTES continues to struggle.
Software: Excellent for the most part. VMW holding its earnings gap,
seeing up well for a new move GLUU broke sharply higher Friday. DATA is
setting up well as is TTWO.
FAANG: AAPL down to end the week, but holding the 20 day EMA and May/June
high. FB holding near the 20 day EMA in a 4 week lateral move after gapping
higher. NFLX holding the 50 day SMA and the June prior high. AMZN sold back
for the 50 day MA but held at the prior week's low. GOOG showed the same
move. If the bids return, all are in decent position to move.
Financial: C is the best of the group, holding the 50 day MA's with a doji.
BAC broke the 50 day MA. GS sold off. JPM trying to hold the 50 day MA's.
Machinery: Outside of CAT, a lot of carnage, e.g. CMI, DE, TEX. HON is
struggling, falling through the 50 day MA on another strong volume session.
MARKET STATS
DJ30
Stats: -76.22 points (-0.35%) to close at 21674.51
Nasdaq
Stats: -5.39 points (-0.09%) to close at 6216.53
Volume: 1.98B (-2.94%)
Up Volume: 838.77M (+336.63M)
Down Volume: 1.11B (-410M)
A/D and Hi/Lo: Advancers led 1.04 to 1
Previous Session: Decliners led 3.89 to 1
New Highs: 29 (-6)
New Lows: 124 (+5)
S&P
Stats: -4.46 points (-0.18%) to close at 2425.55
NYSE Volume: 900M (+17.48%)
A/D and Hi/Lo: Advancers led 1.15 to 1
Previous Session: Decliners led 4.4 to 1
New Highs: 38 (-15)
New Lows: 164 (+19)
SENTIMENT INDICATORS
VIX: 14.26; -1.29
VXN: 17.85; -0.75
VXO: 12.91; +0.09
Put/Call Ratio (CBOE): 1.11; +0.04. Second session over 1.0 after several
weeks below. Enough of these and the market can rebound, but typically this
is after some serious selling, not what we have seen the past few weeks.
Bulls and Bears: Significant drop in bulls, falling 10 points in two weeks.
It hit 60+ for twi straight weeks, enough to set up a drop due to
overexuberance. Bears back up to 18.1, last hit 5 weeks earlier.
Bulls: 50.5 versus 57.5
Bears: 18.1 versus 17.0
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 50.5 versus 57.5
57.5 versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2
versus 61.8 versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6
versus 60.2 versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3
versus 55.6 versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
versus 46.1 versus 46.7 versus 45.2
Bears: 18.1 versus 17.0
17.0 versus 16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6
versus 18.3 versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9
versus 17.9 versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3
versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7
versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8
versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.197% versus 2.185%. Up week for bonds, bouncing off the 50 day EMA
to a higher recovery high. Friday up but then faded to flat. Still heading
higher despite a supposedly more hawkish Fed and better economy. White House
turmoil? Geopolitical tensions? Sure, but the latter are not all the
issues.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.185%
versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201 versus
2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus 2.266%
versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287% versus
2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus 2.318%
versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus 2.375% versus
2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268% versus 2.20%
versus 2.140% versus 2.140% versus 2.148%
EUR/USD: 1.17595 versus 1.17107. Still in the 2.5 week test of the high
logged in early August.
Historical: 1.17107 versus 1.17812 versus 1.17445 versus 1.17751 versus
1.18216 versus 1.17652 versus 1.17596 versus 1.17619 versus 1.17975 versus
1.1774 versus 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 109.205 versus 109.333. Rallied through Tuesday, sold back to the
June and August lows as of Friday. Showed a big doji with tail Friday so
may be ready to try the upside again. Definitely bouncing up and down in
its range.
Historical: 109.333 versus 109.842 versus 110.6621 versus 109.927 versus
109.183 versus 109.177 versus 110.03 versus 109.09 versus 110.09 versus
110.757 versus 110.689 versus 109.963 versus 110.717 versus 110.368 versus
110.28 versus 110.704 versus 111.07 versus 111.166 versus 111.897 versus
111.176 versus 111.128 versus 111.863 versus 111.89 versus 112.096 versus
112.582 versus 112.536 versus 113.314 versus 113.152 versus 113.929 versus
114.063 versus 113.913 versus 113.126 versus 113.253 versus 113.270 versus
112.413 versus 111.993 versus 112.340 versus 112.24 versus 111.943 versus
111.299 versus 111.357 versus 111.278 versus 111.470 versus 111.729 versus
110.873 versus 110.854 versus 109.560 versus 110.060 versus 109.97
Oil: 48.73, +1.64. Nice break higher after a week and more fading back to
the 50 day SMA. Strong upside move as rig count falls to a multiweek low.
Gold: 1290.30, -2.10. After bumping back up to the April and June highs
last week, gold sold to the 20 day then rebounded into Thursday. Again
having issues at the April and June highs. Definitely in the range for now.
MONDAY
There is a lot more of the same in terms of news and economics. The
political discourse descended to new lows the past week and the market sold
with it, but that could easily have been worse. Perhaps the market starts
factoring in the Trump administration is going to get little accomplished
with the Goldman people in control. They will push the same old policies
that benefit the big businesses and not much else, and in this climate no
democrat, and likely many republicans, will vote for something that would
benefit big corporations. My plan from last week would appeal to those
wanting to help small businesses, but then again, the Goldman people are in
charge of the White House now and that kind of initiative has a snowball's
chance in hell of getting even mentioned.
That is all the backdrop anyway. The market factors this in and it shows up
in the patterns. We will play the patterns that take control as the indices
trade Monday and Tuesday.
Ironically, if the indices bounce early week, the question then shifts to
whether they hold the move and continue or roll over again. If they sell,
no question. If they bounce, I would hazard that the indices will hold the
move this time off the double bottom test of NASDAQ, the ABCD from DJ30, the
SOX triangle.
We are looking at plays in line with the positive patterns on NASDAQ and
SOX, but of course cannot ignore the downside in the event this time the
algorithms do not buy the dip, this time a double dip.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6256.56
Resistance:
The 50 day EMA at 6263
6300 is the mid-June interim high
6341.70 is the all-time high from early June.
6461 is the June 2017 prior all-time high
Support:
6205 is the late May all-time high
The 2016 trendline at 6141
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 200 day SMA at 5838
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2441.32
Resistance:
The 50 day EMA at 2446
2453.46 is the June prior all-time closing high
2487 is the upper channel line from the March 2009 uptrend channel
Support:
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
The 200 day SMA at 2339
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,858.32
Resistance:
21,681is the July prior all-time high
22,179 is the August 2017 all-time high
Support:
The 20 day EMA at 21,836
The 50 day EMA at 21,574
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
The 200 day SMA at 20,484
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
8/19/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: SDS
Trailing stops: JWN
Stop alerts: JD
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- A Thursday and Friday repeat of the prior week.
- A double drop starts changing the market's MO
- NASDAQ, SOX still working on good patterns. DJ30 in a nice ABCD
consolidation.
- Some say Friday was a key, but for this market, Monday and Tuesday and
whether a rebound emerges is very important.
A repeat of the prior week, just a bit lower. Two weeks back the market
dropped Tuesday to Thursday with Thursday a big drop, then a modest Friday
recovery. That was followed by a bounce.
This past week, after a solid Monday, the stock indices struggled, then
dropped hard Thursday. A modest session Friday, indeed a doji on SP500 just
as on the prior Friday.
SP500 -4.45, -0.18%
NASDAQ -5.38, -0.09%
DJ30 -76.22, -0.35%
SP400 -0.23%
RUTX -0.08%
SOX 0.20%
VOLUME: NYSE +18%; NASDAQ -3%. Expiration saw NYSE volume finally break
average. With SP500 showing a doji after a dump, perhaps this volume
forecasts a rebound. Again. NASDAQ volume held solid at average as the
index shows a doji at the prior week's low. Not bad at all.
ADVANCE/DECLINE: NYSE 1.2:1; NASDAQ 1.1:1.
Now, do they bounce this coming week, repeating the process?
It is true that this is a double drop, not just one sharp drop that then
leads to a new high as seen again and again in this rally, but a sharp drop,
a bounce, then another sharp drop. That is a change in the MO of these
moves in the uptrend and is ugly enough to break the pattern of dip buying.
It was enough of a change for Mr. Gartman to predict Friday could be the
most important day for the markets in the bull run. Why? A market closing
a week at multiweek lows is often a failing market.
A decent argument based in technical analysis, but I would suggest that
Monday and/or Tuesday are more important. Reason: Indeed this pattern has
shown itself many times in this rally, and after the initial selloff then
pause to end a week, the rallies renewed early the next week. Thus, how the
market fares Monday and Tuesday likely tells much more than Friday.
All speculation about the most important day aside, NASDAQ and SOX remain in
quite decent patterns in terms of holding their trends and forming some good
bases. After two hard days of selling, to still be in the pattern is a
positive, using the selling to wring out the weak hands that ultimately sets
up the demand outstripping supply and a new break higher. That is the
theory, and if SP500 along with SP400 and RUTX were not struggling, you
would anticipate they would keep on working through the pattern and make a
new upside break. As it is, you have once again a bifurcated market, and we
saw how they started coming together last time: the large caps tried to
catch down to the small and midcaps. They never got together that time, not
really close. But, they tried to rally, stalled, sold hard Thursday. Do
they come together this time?
There are still good stocks as well. AMAT is setting up a nice pattern and
LRCX' pattern is similar. China stocks turned a bit squirrely on the week
but finished quite well. AAPL and FB in FAANG remain decent. Software
remains strong, e.g. DATA, GLUU, TTWO, VMW. On the flip, some leaders and
those setting up broke, e.g. machinery, financial, and some strong stocks
such as HON are starting to crack. Then you have consumer stocks such as
PG, CLX looking better along with utilities. Oh, that is great -- stocks
that launched many a dull market.
Will the algorithms buy those stocks, just rotate from other groups as in
the past? Doubt it. At least not only those stocks. NASDAQ and SOX are
still in good patterns while RUTX, SP400 are anchor chains. Again, that
puts NASDAQ and SOX in focus and, surprise, puts market performance
paramount on Monday and Tuesday.
THE MARKET
CHARTS
SOX: SOX continues working on its 3 month triangle pattern, closing the
week just below the 50 day MA. That leaves SOX working in the pattern and
still, despite the selling, leaving it in position to finish the job and
breakout.
NASDAQ: Showing a doji over the 2016 trendline, holding at the prior week's
low and the 61% Fibonacci retracement. That has NASDAQ showing a double
bottom at that retracement, and that pattern at that level is a good rally
point. Compare to the action May to early July: Rally, double bottom at the
61%/78% Fibonacci retracement, then a rally to a new high.
DJ30: Yes DJ30 sold off Thursday with the market, Friday as well. This all
inside the July to August run to a new high. DJ30 has stair-stepped back to
the 50 day MA's and the 78% Fibonacci retracement. That, despite the
selling, puts DJ30 in great position to rebound again.
SP500: Broke the 2016 trendline Thursday, sold farther Friday, showing a
doji -- just as the prior Friday. Of all the large cap indices, SP500 shows
the most Gartman-like concern: new low to end the week after a new low the
prior week. We went ahead and picked up a partial downside position on
SP500 to end the week.
SP400: After bouncing off the 200 day SMA the prior Friday and Monday,
SP400 rolled over and suffered another Thursday thumping. That selling took
SP500 through the 200 day SMA. Friday a gap lower, but showing a doji.
Similar to SP500, SP400 fits the lower weekly close in a series of lower
weekly closes.
RUTX: Same action as SP400, just sharper. Held the 200 day the prior week,
bounced, rolled back over and crashed the 200 day Thursday. A big selloff
Friday with a gap lower, but recovering off the low to a doji with tail. On
the Friday low it tested the May and some of the April lows. RUTX is in a
range where it can find support to bounce. It likely attempts a recovery
early week, stalls at the 200 day, then heads down to test the January,
March, April lows.
LEADERSHIP
Some areas losing bids, others holding up well enough.
Semiconductors: AMAT and LRCX somewhat reflect the SOX and its triangle
pattern. AMAT posted earnings Friday and they were good enough to keep it
working on the pattern. MCHP lost some luster but still holding the 50 day
in a decent pattern. SLAB is setting up decently as is ON, BRKS. AVGO is
testing and holding the 50 day MA in a 3 month consolidation. QRVO
struggled some to end the week but is holding the 50 day. Many are at best
'mushy': AMD, XLNX, MU.
China stocks: Turned choppy the past two weeks but held on and some good
moves to end the week. BABA gapped on earnings, added more Friday. BIDU
tested, but is setting up well at the 20 day EMA. HTHT, BZUN enjoyed strong
weeks again. SOHU is set up very well to break higher. SINA looks solid
still. YY recovering from a gap lower on earnings. BITA looks good to go.
Not all is great. JD broke lower, NTES continues to struggle.
Software: Excellent for the most part. VMW holding its earnings gap,
seeing up well for a new move GLUU broke sharply higher Friday. DATA is
setting up well as is TTWO.
FAANG: AAPL down to end the week, but holding the 20 day EMA and May/June
high. FB holding near the 20 day EMA in a 4 week lateral move after gapping
higher. NFLX holding the 50 day SMA and the June prior high. AMZN sold back
for the 50 day MA but held at the prior week's low. GOOG showed the same
move. If the bids return, all are in decent position to move.
Financial: C is the best of the group, holding the 50 day MA's with a doji.
BAC broke the 50 day MA. GS sold off. JPM trying to hold the 50 day MA's.
Machinery: Outside of CAT, a lot of carnage, e.g. CMI, DE, TEX. HON is
struggling, falling through the 50 day MA on another strong volume session.
MARKET STATS
DJ30
Stats: -76.22 points (-0.35%) to close at 21674.51
Nasdaq
Stats: -5.39 points (-0.09%) to close at 6216.53
Volume: 1.98B (-2.94%)
Up Volume: 838.77M (+336.63M)
Down Volume: 1.11B (-410M)
A/D and Hi/Lo: Advancers led 1.04 to 1
Previous Session: Decliners led 3.89 to 1
New Highs: 29 (-6)
New Lows: 124 (+5)
S&P
Stats: -4.46 points (-0.18%) to close at 2425.55
NYSE Volume: 900M (+17.48%)
A/D and Hi/Lo: Advancers led 1.15 to 1
Previous Session: Decliners led 4.4 to 1
New Highs: 38 (-15)
New Lows: 164 (+19)
SENTIMENT INDICATORS
VIX: 14.26; -1.29
VXN: 17.85; -0.75
VXO: 12.91; +0.09
Put/Call Ratio (CBOE): 1.11; +0.04. Second session over 1.0 after several
weeks below. Enough of these and the market can rebound, but typically this
is after some serious selling, not what we have seen the past few weeks.
Bulls and Bears: Significant drop in bulls, falling 10 points in two weeks.
It hit 60+ for twi straight weeks, enough to set up a drop due to
overexuberance. Bears back up to 18.1, last hit 5 weeks earlier.
Bulls: 50.5 versus 57.5
Bears: 18.1 versus 17.0
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 50.5 versus 57.5
57.5 versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2
versus 61.8 versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6
versus 60.2 versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3
versus 55.6 versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
versus 46.1 versus 46.7 versus 45.2
Bears: 18.1 versus 17.0
17.0 versus 16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6
versus 18.3 versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9
versus 17.9 versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3
versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7
versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8
versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.197% versus 2.185%. Up week for bonds, bouncing off the 50 day EMA
to a higher recovery high. Friday up but then faded to flat. Still heading
higher despite a supposedly more hawkish Fed and better economy. White House
turmoil? Geopolitical tensions? Sure, but the latter are not all the
issues.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.185%
versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201 versus
2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus 2.266%
versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287% versus
2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus 2.318%
versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus 2.375% versus
2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268% versus 2.20%
versus 2.140% versus 2.140% versus 2.148%
EUR/USD: 1.17595 versus 1.17107. Still in the 2.5 week test of the high
logged in early August.
Historical: 1.17107 versus 1.17812 versus 1.17445 versus 1.17751 versus
1.18216 versus 1.17652 versus 1.17596 versus 1.17619 versus 1.17975 versus
1.1774 versus 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 109.205 versus 109.333. Rallied through Tuesday, sold back to the
June and August lows as of Friday. Showed a big doji with tail Friday so
may be ready to try the upside again. Definitely bouncing up and down in
its range.
Historical: 109.333 versus 109.842 versus 110.6621 versus 109.927 versus
109.183 versus 109.177 versus 110.03 versus 109.09 versus 110.09 versus
110.757 versus 110.689 versus 109.963 versus 110.717 versus 110.368 versus
110.28 versus 110.704 versus 111.07 versus 111.166 versus 111.897 versus
111.176 versus 111.128 versus 111.863 versus 111.89 versus 112.096 versus
112.582 versus 112.536 versus 113.314 versus 113.152 versus 113.929 versus
114.063 versus 113.913 versus 113.126 versus 113.253 versus 113.270 versus
112.413 versus 111.993 versus 112.340 versus 112.24 versus 111.943 versus
111.299 versus 111.357 versus 111.278 versus 111.470 versus 111.729 versus
110.873 versus 110.854 versus 109.560 versus 110.060 versus 109.97
Oil: 48.73, +1.64. Nice break higher after a week and more fading back to
the 50 day SMA. Strong upside move as rig count falls to a multiweek low.
Gold: 1290.30, -2.10. After bumping back up to the April and June highs
last week, gold sold to the 20 day then rebounded into Thursday. Again
having issues at the April and June highs. Definitely in the range for now.
MONDAY
There is a lot more of the same in terms of news and economics. The
political discourse descended to new lows the past week and the market sold
with it, but that could easily have been worse. Perhaps the market starts
factoring in the Trump administration is going to get little accomplished
with the Goldman people in control. They will push the same old policies
that benefit the big businesses and not much else, and in this climate no
democrat, and likely many republicans, will vote for something that would
benefit big corporations. My plan from last week would appeal to those
wanting to help small businesses, but then again, the Goldman people are in
charge of the White House now and that kind of initiative has a snowball's
chance in hell of getting even mentioned.
That is all the backdrop anyway. The market factors this in and it shows up
in the patterns. We will play the patterns that take control as the indices
trade Monday and Tuesday.
Ironically, if the indices bounce early week, the question then shifts to
whether they hold the move and continue or roll over again. If they sell,
no question. If they bounce, I would hazard that the indices will hold the
move this time off the double bottom test of NASDAQ, the ABCD from DJ30, the
SOX triangle.
We are looking at plays in line with the positive patterns on NASDAQ and
SOX, but of course cannot ignore the downside in the event this time the
algorithms do not buy the dip, this time a double dip.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6256.56
Resistance:
The 50 day EMA at 6263
6300 is the mid-June interim high
6341.70 is the all-time high from early June.
6461 is the June 2017 prior all-time high
Support:
6205 is the late May all-time high
The 2016 trendline at 6141
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 200 day SMA at 5838
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2441.32
Resistance:
The 50 day EMA at 2446
2453.46 is the June prior all-time closing high
2487 is the upper channel line from the March 2009 uptrend channel
Support:
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
The 200 day SMA at 2339
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,858.32
Resistance:
21,681is the July prior all-time high
22,179 is the August 2017 all-time high
Support:
The 20 day EMA at 21,836
The 50 day EMA at 21,574
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
The 200 day SMA at 20,484
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
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Sunday, August 13, 2017
The Daily, Part 1 of 3, 8-12-17
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8/12/2017 Investment House Daily
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Friday sees some relief though low volume and narrow breadth as usual.
- RUTX, SP400 already at the 200 day SMA, first time since 11/16. Loss
leaders become bounce leaders?
- SP500, NASDAQ, SOX bounce back to resistance.
- Seen this setup before and stocks rallied. Is it different this time?
- Next move is in the algorithms' hands
- Trump tells China he his ordering an investigation into Chinese trade
practices.
Is it over yet? Safe to come out? It depends. On what you consider safe.
After the impressive Thursday declines there was a rebound. Of sorts.
Hardly commensurate with the selloff, but the selling did not continue
Friday.
SP500 3.11, 0.13%
NASDAQ 39.69, 0.64%
DJ30 14.31, 0.07%
SP400 0.19%
RUTX 0.12%
SOX 0.58%
NASDAQ 100 0.75%
VOLUME: NYSE -8%, NASDAQ -18%. Just like volume to run out when stocks try
to recover from a rout. NYSE slid back to lower below average while NASDAQ
gave up an above average volume selling session, slipping back below average
on the upside. Obviously no renewed upside buying strength.
ADVANCE/DECLINE: NYSE 1.2:1, NASDAQ 1.1:1. A powerhouse advance. NASDAQ
100 led the move higher as the big names garnered what few upside moves
there were.
THE MARKET
The stocks indices, again, fall into two categories. Okay, with the DJ30
thrown in it is three categories. It is just that the roles have changed.
Category 1: The Dow
DJ30: This index is in another world from the other indices. Sure, it sold
last week, but it was abnormally normal in its orderly test of an impressive
string of consecutive new highs. Holding at the 20 day EMA Thursday after
the selloff, again with a doji at the 20 day. Juxtaposed to the other
indices, quite abnormally normal.
Category 2: SP500, NASDAQ, SOX
This category contains indices that broke hard lower, broke next support,
and as of Friday are still problematic.
SP500: After spending three weeks riding along the 2009 upper channel line
SP500 tested. Then Thursday it dove lower, breaking the 50 day MA's.
Higher but not huge volume. Not even above average. It was not a massive
selloff. There was more downside volume in mid-May on that break of the 50
day MA's, but we all know that bounced right back after closing for a second
session below the 50 day MA. What am I saying? This is nothing that hasn't
been seen and overcome before. The selling was ugly, just as it was in May.
The question remains: will the algorithms buy on this dip or will they keep
selling the SP500 new high that reversed ahead of the Thursday selloff.
That said, the Friday bounce was NOT strong and sets up the potential to
fail at the 50 day MA and continue lower.
NASDAQ: After spending over a week working laterally over the 20 day EMA
and holding the June prior high, NASDAQ broke higher Tuesday but reversed.
Thursday it too dove below the 50 day MA's. It also broke the early June
prior high. Friday it recovered some ground but closed below the 50 day
MA's. Unlike SP500, NASDAQ volume jumped above average on the selling.
Still not huge trade, but above average. As with SP500, we have seen this
move before. NASDAQ also ripped lower in mid-May on volume but rebounded.
In June it broke the 50 day MA. It recovered to higher highs each time.
Indeed, NASDAQ can still give some ground and hold its uptrend. Sure
Thursday was ugly, but been there before and lived to tell about it. As with
SP500, the question is will the algorithms buy this dip or keep selling that
last new all-time high? That said, NASDAQ is just like SP500, and the
Friday rebound sets up a fade.
SOX: SOX could almost be in a category of its own. It never made a higher
high on the last rally before rolling over. It came back to the 50 day EMA,
looked as if it might form an inverted head and shoulders. Then it broke
lower Thursday, sold more Friday, then recovered a bit of ground to
positive. SOX, yes, CAN hold here and continue higher, it just doesn't look
very good. SOX is always a market key as it tends to forecast the overall
market moves. When it broke the possible inverted head and shoulders, that
was a mark against the uptrend.
Category 3: SP400, RUTX
These two indices were leaders -- in the selling.
SP400: Broke the 50 day MA's to start August, moved laterally, then plunged
Wednesday to Thursday. Gapped down to the 200 day SMA Friday, rebounded to
positive. A clear trend break, breaking the December 2016 to August 2017
trend. The last time SP400 visited the 200 day was in November 2016. It
held. Thus, SP400 may have shifted from downside market leader to ready to
help lead a bounce upside.
RUTX: Same action as SP400, working laterally below the 50 day MA after
breaking that level to start August, then bombing lower to the 200 day SMA
on the Friday open. RUTX bounced off the 200 day and closed with a modest
gain and a doji. That doji suggests it is ready for a relief bounce. Last
time at the 200 day SMA: November 2016. As with SP400, ready to turn from a
loss leader to a new upside leader?
IN SUM, the market was bifurcated as the small and midcaps broke support.
The other indices, sans DJ30, caught down to those two indices. Now those
two loss leaders are at the 200 day SMA and, just as they did in November
2016, can rebound in some more upside and perhaps lead a move higher.
Stranger things have happened of course, particularly in this Fed and plunge
protection dominated market. The swing vote, the key vote, is still the
algorithms and whether they buy the dip or just keep selling. Volume is not
that heavy on this drop so it does not look that the algorithms all threw in
to the downside.
MARKET STATS
DJ30
Stats: +14.31 points (+0.07%) to close at 21858.32
Nasdaq
Stats: +39.68 points (+0.64%) to close at 6256.56
Volume: 1.8B (-18.18%)
Up Volume: 1.15B (+740.17M)
Down Volume: 625.77M (-1.154B)
A/D and Hi/Lo: Advancers led 1.1 to 1
Previous Session: Decliners led 3.86 to 1
New Highs: 27 (-5)
New Lows: 130 (-18)
S&P
Stats: +3.11 points (+0.13%) to close at 2441.32
NYSE Volume: 790.6M (-7.98%)
A/D and Hi/Lo: Advancers led 1.15 to 1
Previous Session: Decliners led 6.47 to 1
New Highs: 17 (-22)
New Lows: 157 (+38)
SENTIMENT INDICATORS
Interesting week as more very intelligent money managers turn bearish.
Dennis Gartman cited those very intelligent people as he made the prediction
that the long bull run for stocks is over. He said he realized what kind of
damage such a call, if incorrect, could do to an 'already damaged'
reputation, but he just feels compelled to do it.
I am reminded of a gambler who has squandered most of his fortune, but makes
one last bet with his remaining capital to make that one big score. If
correct, he lives to gamble another day. If not, it is over.
So, more negative sentiment from the big names, though Gartman has lost big
name status as he has sadly made multiple wrong calls on stocks, oil, and
other commodities over the past year or two. He truly appears to have just
flip-flopped as the markets sold then rebounded, sold then rebounded. The
problem is you have to recognize you can and will be wrong. You must
recognize you don't know with any certainty at all what the market will do.
You study the patterns, the moves, the trends, and distill down to the
possible moves at any given point. Sometimes there are clear inflection
points, e.g. SP400 and RUTX at the 200 day SMA right now. Then, you put
yourself in position to play what appear to be the high probability plays,
and importantly, the high profitability plays, up and down, at that time.
Then when the moves are made, you play them.
Gartman really needs to be right this time because he has lost sight of what
he really knows and does not know and thus made 'certainty' calls for market
direction. When those go wrong, it is death. And sadly for him, the
commentary to his Friday announcement about the bear market's end brought
out the morbid humor. "He has given up on prognosticating and has decided
to become Captain Obvious." "How can you stake something you no longer
have?" "At this point one has to wonder if Gartman's own family fades his
market calls." The market is, as always, ruthless.
VIX: 15.51; -0.53
VXN: 17.77; -1.29
VXO: 12.87; -0.99
Put/Call Ratio (CBOE): 0.97; +0.04
Bulls and Bears: The two week fade appears to have caught up with some of
the bulls as the number fell below 60 for the first time in three weeks.
Reached levels that call for more serious corrections. Perhaps NASDAQ and
SP500 are trying, but will the Powers let them fall?
Bulls: 57.5 versus 60.0
Bears: 17.0 versus 16.2
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 57.5 versus 60.0
60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5
versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7
versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1
versus 46.7 versus 45.2
Bears: 17.0 versus 16.2
16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3
versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9
versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75
versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6
versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3
OTHER MARKETS
Bonds: 2.191% versus 2.201%. Bonds are trying to break higher to take on
the June high.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.201
versus 2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus
2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287%
versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus
2.318% versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus 2.375%
versus 2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268% versus
2.20% versus 2.140% versus 2.140% versus 2.148%
EUR/USD: 1.18216 versus 1.17652. Euro bounces up off support, ready to
rally some more.
Historical: 1.17652 versus 1.17596 versus 1.17619 versus 1.17975 versus
1.1774 versus 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 109.183 versus 109.177. Trying to bounce off the selloff, but in a
sharp downtrend.
Historical: 109.177 versus 110.03 versus 109.09 versus 110.09 versus
110.757 versus 110.689 versus 109.963 versus 110.717 versus 110.368 versus
110.28 versus 110.704 versus 111.07 versus 111.166 versus 111.897 versus
111.176 versus 111.128 versus 111.863 versus 111.89 versus 112.096 versus
112.582 versus 112.536 versus 113.314 versus 113.152 versus 113.929 versus
114.063 versus 113.913 versus 113.126 versus 113.253 versus 113.270 versus
112.413 versus 111.993 versus 112.340 versus 112.24 versus 111.943 versus
111.299 versus 111.357 versus 111.278 versus 111.470 versus 111.729 versus
110.873 versus 110.854 versus 109.560 versus 110.060 versus 109.97
Oil: 48.82, +0.23. Oil faded to test the 20 day EMA to end the week,
showing a nice doji with tail. Still an excellent setup for the upside.
Needs something to trigger it.
Gold: 1294.00, +3.90. Gold is now bumping the April and June highs.
THIS WEEK
Given the index setups, this could actually be a week that decides some
direction. As noted earlier, the volume was not such that would indicate
the algorithms decided it was time to dump all stocks in a sell the rally
move.
Therefore, as we are not, as some seem to believe they are, omniscient with
what the self-thinking algos are going to do, we just prep for what can
happen off this selling. Nothing new there regardless whether algos, fund
managers, pension managers, etc. are making the investing decisions. There
are some good upside plays to make us money if the bids return, and some
downside for sure if they bids do not return.
That raises a very interesting point. When ETF's started to gain
popularity, I believed that was the start of the destruction of the markets.
Not that ETF's were the problem themselves, they were just part of the
preparation for market demise. They allow lazy investing, and the irony is,
they do not reflect the dollar for dollar moves of the stocks that comprise
the ETF. That is up to the ETF management, within certain limits of course.
As ETF's grew in popularity, you started to see market distorting movements.
Stocks would move intraday, but the ETF's would not follow. Then, in the
last hour, large index price moves occurred as the ETF's were brought more
in line with the days' trading action.
Now the next step is in place: algorithms running some very large funds and
thus lots of money, coupled with smaller robot advisors that tell investors
what ETF's to place their money. Then it is all turned over to the
machines. People playing the ETF game get unmercifully whipsawed as they
are rebalanced in sudden moves. It is like a mini expiration session every
session.
If you pay attention to how the algos trade you, how they accumulate shares,
etc., you recognize the tracks just as always, regardless of who manages the
money. That is why the false breakdown proved to be such a good entry for
us: program trades and algos were taught to buy those, and they have
dutifully done so for years. Thus, what does the current situation on
NASDAQ, SP500, and SOX show? Another break of support that could be a false
break.
In any event, this is going to lead to the destruction of any real
price-finding market. When the machines take over most of the action, that
will be the day the market ceases to reflect what markets have always shown,
e.g. the belief of investors as to the economic future, and will instead
reflect only the reactions of each algorithm and program to the headlines
that appear in the news ticker.
That puts a whole new angle on 'fake news' does it not? You have seen how a
planned rumor can move a stock, even the market. Just think what happens
when hundreds, even thousands, of headline-reading programs react to each
headline, and then what happens when the ETF's are then 'balanced' at the
end of the session to reflect the latest headlines? Destruction of markets.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6256.56
Resistance:
The 50 day EMA at 6263
6300 is the mid-June interim high
6341.70 is the all-time high from early June.
6461 is the June 2017 prior all-time high
Support:
6205 is the late May all-time high
The 2016 trendline at 6141
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 200 day SMA at 5838
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2441.32
Resistance:
The 50 day EMA at 2446
2453.46 is the June prior all-time closing high
2487 is the upper channel line from the March 2009 uptrend channel
Support:
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
The 200 day SMA at 2339
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,858.32
Resistance:
21,681is the July prior all-time high
22,179 is the August 2017 all-time high
Support:
The 20 day EMA at 21,836
The 50 day EMA at 21,574
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
The 200 day SMA at 20,484
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Friday sees some relief though low volume and narrow breadth as usual.
- RUTX, SP400 already at the 200 day SMA, first time since 11/16. Loss
leaders become bounce leaders?
- SP500, NASDAQ, SOX bounce back to resistance.
- Seen this setup before and stocks rallied. Is it different this time?
- Next move is in the algorithms' hands
- Trump tells China he his ordering an investigation into Chinese trade
practices.
Is it over yet? Safe to come out? It depends. On what you consider safe.
After the impressive Thursday declines there was a rebound. Of sorts.
Hardly commensurate with the selloff, but the selling did not continue
Friday.
SP500 3.11, 0.13%
NASDAQ 39.69, 0.64%
DJ30 14.31, 0.07%
SP400 0.19%
RUTX 0.12%
SOX 0.58%
NASDAQ 100 0.75%
VOLUME: NYSE -8%, NASDAQ -18%. Just like volume to run out when stocks try
to recover from a rout. NYSE slid back to lower below average while NASDAQ
gave up an above average volume selling session, slipping back below average
on the upside. Obviously no renewed upside buying strength.
ADVANCE/DECLINE: NYSE 1.2:1, NASDAQ 1.1:1. A powerhouse advance. NASDAQ
100 led the move higher as the big names garnered what few upside moves
there were.
THE MARKET
The stocks indices, again, fall into two categories. Okay, with the DJ30
thrown in it is three categories. It is just that the roles have changed.
Category 1: The Dow
DJ30: This index is in another world from the other indices. Sure, it sold
last week, but it was abnormally normal in its orderly test of an impressive
string of consecutive new highs. Holding at the 20 day EMA Thursday after
the selloff, again with a doji at the 20 day. Juxtaposed to the other
indices, quite abnormally normal.
Category 2: SP500, NASDAQ, SOX
This category contains indices that broke hard lower, broke next support,
and as of Friday are still problematic.
SP500: After spending three weeks riding along the 2009 upper channel line
SP500 tested. Then Thursday it dove lower, breaking the 50 day MA's.
Higher but not huge volume. Not even above average. It was not a massive
selloff. There was more downside volume in mid-May on that break of the 50
day MA's, but we all know that bounced right back after closing for a second
session below the 50 day MA. What am I saying? This is nothing that hasn't
been seen and overcome before. The selling was ugly, just as it was in May.
The question remains: will the algorithms buy on this dip or will they keep
selling the SP500 new high that reversed ahead of the Thursday selloff.
That said, the Friday bounce was NOT strong and sets up the potential to
fail at the 50 day MA and continue lower.
NASDAQ: After spending over a week working laterally over the 20 day EMA
and holding the June prior high, NASDAQ broke higher Tuesday but reversed.
Thursday it too dove below the 50 day MA's. It also broke the early June
prior high. Friday it recovered some ground but closed below the 50 day
MA's. Unlike SP500, NASDAQ volume jumped above average on the selling.
Still not huge trade, but above average. As with SP500, we have seen this
move before. NASDAQ also ripped lower in mid-May on volume but rebounded.
In June it broke the 50 day MA. It recovered to higher highs each time.
Indeed, NASDAQ can still give some ground and hold its uptrend. Sure
Thursday was ugly, but been there before and lived to tell about it. As with
SP500, the question is will the algorithms buy this dip or keep selling that
last new all-time high? That said, NASDAQ is just like SP500, and the
Friday rebound sets up a fade.
SOX: SOX could almost be in a category of its own. It never made a higher
high on the last rally before rolling over. It came back to the 50 day EMA,
looked as if it might form an inverted head and shoulders. Then it broke
lower Thursday, sold more Friday, then recovered a bit of ground to
positive. SOX, yes, CAN hold here and continue higher, it just doesn't look
very good. SOX is always a market key as it tends to forecast the overall
market moves. When it broke the possible inverted head and shoulders, that
was a mark against the uptrend.
Category 3: SP400, RUTX
These two indices were leaders -- in the selling.
SP400: Broke the 50 day MA's to start August, moved laterally, then plunged
Wednesday to Thursday. Gapped down to the 200 day SMA Friday, rebounded to
positive. A clear trend break, breaking the December 2016 to August 2017
trend. The last time SP400 visited the 200 day was in November 2016. It
held. Thus, SP400 may have shifted from downside market leader to ready to
help lead a bounce upside.
RUTX: Same action as SP400, working laterally below the 50 day MA after
breaking that level to start August, then bombing lower to the 200 day SMA
on the Friday open. RUTX bounced off the 200 day and closed with a modest
gain and a doji. That doji suggests it is ready for a relief bounce. Last
time at the 200 day SMA: November 2016. As with SP400, ready to turn from a
loss leader to a new upside leader?
IN SUM, the market was bifurcated as the small and midcaps broke support.
The other indices, sans DJ30, caught down to those two indices. Now those
two loss leaders are at the 200 day SMA and, just as they did in November
2016, can rebound in some more upside and perhaps lead a move higher.
Stranger things have happened of course, particularly in this Fed and plunge
protection dominated market. The swing vote, the key vote, is still the
algorithms and whether they buy the dip or just keep selling. Volume is not
that heavy on this drop so it does not look that the algorithms all threw in
to the downside.
MARKET STATS
DJ30
Stats: +14.31 points (+0.07%) to close at 21858.32
Nasdaq
Stats: +39.68 points (+0.64%) to close at 6256.56
Volume: 1.8B (-18.18%)
Up Volume: 1.15B (+740.17M)
Down Volume: 625.77M (-1.154B)
A/D and Hi/Lo: Advancers led 1.1 to 1
Previous Session: Decliners led 3.86 to 1
New Highs: 27 (-5)
New Lows: 130 (-18)
S&P
Stats: +3.11 points (+0.13%) to close at 2441.32
NYSE Volume: 790.6M (-7.98%)
A/D and Hi/Lo: Advancers led 1.15 to 1
Previous Session: Decliners led 6.47 to 1
New Highs: 17 (-22)
New Lows: 157 (+38)
SENTIMENT INDICATORS
Interesting week as more very intelligent money managers turn bearish.
Dennis Gartman cited those very intelligent people as he made the prediction
that the long bull run for stocks is over. He said he realized what kind of
damage such a call, if incorrect, could do to an 'already damaged'
reputation, but he just feels compelled to do it.
I am reminded of a gambler who has squandered most of his fortune, but makes
one last bet with his remaining capital to make that one big score. If
correct, he lives to gamble another day. If not, it is over.
So, more negative sentiment from the big names, though Gartman has lost big
name status as he has sadly made multiple wrong calls on stocks, oil, and
other commodities over the past year or two. He truly appears to have just
flip-flopped as the markets sold then rebounded, sold then rebounded. The
problem is you have to recognize you can and will be wrong. You must
recognize you don't know with any certainty at all what the market will do.
You study the patterns, the moves, the trends, and distill down to the
possible moves at any given point. Sometimes there are clear inflection
points, e.g. SP400 and RUTX at the 200 day SMA right now. Then, you put
yourself in position to play what appear to be the high probability plays,
and importantly, the high profitability plays, up and down, at that time.
Then when the moves are made, you play them.
Gartman really needs to be right this time because he has lost sight of what
he really knows and does not know and thus made 'certainty' calls for market
direction. When those go wrong, it is death. And sadly for him, the
commentary to his Friday announcement about the bear market's end brought
out the morbid humor. "He has given up on prognosticating and has decided
to become Captain Obvious." "How can you stake something you no longer
have?" "At this point one has to wonder if Gartman's own family fades his
market calls." The market is, as always, ruthless.
VIX: 15.51; -0.53
VXN: 17.77; -1.29
VXO: 12.87; -0.99
Put/Call Ratio (CBOE): 0.97; +0.04
Bulls and Bears: The two week fade appears to have caught up with some of
the bulls as the number fell below 60 for the first time in three weeks.
Reached levels that call for more serious corrections. Perhaps NASDAQ and
SP500 are trying, but will the Powers let them fall?
Bulls: 57.5 versus 60.0
Bears: 17.0 versus 16.2
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 57.5 versus 60.0
60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5
versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7
versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1
versus 46.7 versus 45.2
Bears: 17.0 versus 16.2
16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3
versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9
versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75
versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6
versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3
OTHER MARKETS
Bonds: 2.191% versus 2.201%. Bonds are trying to break higher to take on
the June high.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.201
versus 2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus
2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287%
versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus
2.318% versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus 2.375%
versus 2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268% versus
2.20% versus 2.140% versus 2.140% versus 2.148%
EUR/USD: 1.18216 versus 1.17652. Euro bounces up off support, ready to
rally some more.
Historical: 1.17652 versus 1.17596 versus 1.17619 versus 1.17975 versus
1.1774 versus 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 109.183 versus 109.177. Trying to bounce off the selloff, but in a
sharp downtrend.
Historical: 109.177 versus 110.03 versus 109.09 versus 110.09 versus
110.757 versus 110.689 versus 109.963 versus 110.717 versus 110.368 versus
110.28 versus 110.704 versus 111.07 versus 111.166 versus 111.897 versus
111.176 versus 111.128 versus 111.863 versus 111.89 versus 112.096 versus
112.582 versus 112.536 versus 113.314 versus 113.152 versus 113.929 versus
114.063 versus 113.913 versus 113.126 versus 113.253 versus 113.270 versus
112.413 versus 111.993 versus 112.340 versus 112.24 versus 111.943 versus
111.299 versus 111.357 versus 111.278 versus 111.470 versus 111.729 versus
110.873 versus 110.854 versus 109.560 versus 110.060 versus 109.97
Oil: 48.82, +0.23. Oil faded to test the 20 day EMA to end the week,
showing a nice doji with tail. Still an excellent setup for the upside.
Needs something to trigger it.
Gold: 1294.00, +3.90. Gold is now bumping the April and June highs.
THIS WEEK
Given the index setups, this could actually be a week that decides some
direction. As noted earlier, the volume was not such that would indicate
the algorithms decided it was time to dump all stocks in a sell the rally
move.
Therefore, as we are not, as some seem to believe they are, omniscient with
what the self-thinking algos are going to do, we just prep for what can
happen off this selling. Nothing new there regardless whether algos, fund
managers, pension managers, etc. are making the investing decisions. There
are some good upside plays to make us money if the bids return, and some
downside for sure if they bids do not return.
That raises a very interesting point. When ETF's started to gain
popularity, I believed that was the start of the destruction of the markets.
Not that ETF's were the problem themselves, they were just part of the
preparation for market demise. They allow lazy investing, and the irony is,
they do not reflect the dollar for dollar moves of the stocks that comprise
the ETF. That is up to the ETF management, within certain limits of course.
As ETF's grew in popularity, you started to see market distorting movements.
Stocks would move intraday, but the ETF's would not follow. Then, in the
last hour, large index price moves occurred as the ETF's were brought more
in line with the days' trading action.
Now the next step is in place: algorithms running some very large funds and
thus lots of money, coupled with smaller robot advisors that tell investors
what ETF's to place their money. Then it is all turned over to the
machines. People playing the ETF game get unmercifully whipsawed as they
are rebalanced in sudden moves. It is like a mini expiration session every
session.
If you pay attention to how the algos trade you, how they accumulate shares,
etc., you recognize the tracks just as always, regardless of who manages the
money. That is why the false breakdown proved to be such a good entry for
us: program trades and algos were taught to buy those, and they have
dutifully done so for years. Thus, what does the current situation on
NASDAQ, SP500, and SOX show? Another break of support that could be a false
break.
In any event, this is going to lead to the destruction of any real
price-finding market. When the machines take over most of the action, that
will be the day the market ceases to reflect what markets have always shown,
e.g. the belief of investors as to the economic future, and will instead
reflect only the reactions of each algorithm and program to the headlines
that appear in the news ticker.
That puts a whole new angle on 'fake news' does it not? You have seen how a
planned rumor can move a stock, even the market. Just think what happens
when hundreds, even thousands, of headline-reading programs react to each
headline, and then what happens when the ETF's are then 'balanced' at the
end of the session to reflect the latest headlines? Destruction of markets.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6256.56
Resistance:
The 50 day EMA at 6263
6300 is the mid-June interim high
6341.70 is the all-time high from early June.
6461 is the June 2017 prior all-time high
Support:
6205 is the late May all-time high
The 2016 trendline at 6141
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 200 day SMA at 5838
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2441.32
Resistance:
The 50 day EMA at 2446
2453.46 is the June prior all-time closing high
2487 is the upper channel line from the March 2009 uptrend channel
Support:
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
The 200 day SMA at 2339
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,858.32
Resistance:
21,681is the July prior all-time high
22,179 is the August 2017 all-time high
Support:
The 20 day EMA at 21,836
The 50 day EMA at 21,574
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
The 200 day SMA at 20,484
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
_______________________________________________________
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Saturday, August 05, 2017
The Daily, Part 1 of 3, 8-5-17
* * * *
8/5/2017 Investment House Daily
* * * *
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MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: AAOI; LITE
The market alert service is a premium level service where we issue intraday
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The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE NEWS/ECONOMY OVERVIEW CLICK:
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TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
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********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Jobs report beats, shows some decent improvement (though still not that
great), market goes nowhere. Again.
- Another piece of good news cannot break the indices higher, but they also
don't break lower and remain in position to bounce.
- Jobs market will never change with these policies in place.
- Plenty of bulls, lots of expert bears, but no one saying a correction is
imminent. Does that mean it is?
- Indices in position, good leadership remains as does the Fed. Have to
respect that.
Futures were up a bit before the July Jobs Report. They were up a bit after
the July Jobs Report. By the end of the session the stock indices were up a
bit. DJ30 put in yet another new high. SP500 continued to walk laterally
on the 10 day EMA and just below the 2009 upper channel line. NASDAQ and
SOX show doji over the 50 day EMA. SP400 and RUTX bounced to test the break
below the 50 day MA, below some resistance but still in the ballpark to hold
and resume the upside. In position, they just couldn't make the move even
after a pretty solid jobs report, strong AAPL earnings, and of course, a
continued benevolent Federal Reserve.
SP500 4.67, 0.19%
NASDAQ 11.22, 0.18%
DJ30 66.71, 0.30%
SP400 0.24%
RUTX 0.50%$
SOX 0.06%
NASDAQ 100 0.15%
The close looks better than it was 10 minutes before the close. SOX was
negative, SP500 was flirting with negative -- then a late bid bounced things
to a better finishing look.
VOLUME: NYSE -6%; NASDAQ -10%. Upside session volume failure with both
NYSE and NASDAQ dropping below average. Even with a jobs report. But, it
was a Friday in late summer and volume can be lower.
ADVANCE/DECLINE: NYSE 1.3:1; NASDAQ 1.4:1. About in line with lackluster
gains.
It was a do nothing session in terms of overall movement and in terms of
altering the index patterns of the past 1 to 2 weeks.. Sometimes, however,
doing nothing can be the better option, particularly on a Friday after some
downside weeks.
Specifically, SP500, NASDAQ, and SOX are in very good position to start a
new upside leg. SOX is showing a doji at the 50 day EMA. NASDAQ a doji at
the 20 day EMA as it sits on top of the June prior high. SP500 is still
below its 2009 upper channel line, riding the 10 day EMA. A good
consolidation of the last highs, a nice quiet test.
SP400 and RUTX are not as neat and tidy, but they are at least holding near
the 50 day MA after breaking them Thursday. Not perfect but if the other
indices move up, they will likely follow. Likely. The economic data,
July's Jobs Report notwithstanding, is not good. ISM Services managed to
hold expansion territory, but dropped to the lowest in a year. Services led
the expansion. That puts it more in perspective. Then there are June's
Factory Orders that were all Boeing. Without those planes, orders were
negative. Capex investment was flat. Small and midcaps are domestically
economically sensitive. Thus it is not surprising their patterns have sold
more and harder than the large cap indices.
Leadership remains good enough. AAPL, FB and even NFLX are solid enough.
The financials are hanging in. China stocks ditto. Software had a good
week on some solid earnings. Large drugs and biotechs are good enough.
Large manufacturing, e.g. CAT, HON. After a week or more of selling chips
may be ready to attempt a bounce. It is no surprise the large cap leaders
are in better shape: look at what indices are in better shape.
In sum, the action leaves the non-DJ30 large cap indices in good position to
bounce. Leadership is good enough and after a test others are in position
to rebound. The small and midcaps are weaker but nothing a new general
market bounce cannot overcome.
NEWS/ECONOMY
June Jobs Report beats, is not bad, but it is not great.
The jobs report was stronger than expected across the board: wages, jobs,
participation, and revisions. "A little bit of a pickup" says CNBC's Kelly
Evans, hating the number. Okay, economist Mark Zandi says, after his ADP
report Thursday, the jobs market is in "high gear." The report blows out
anticipated non-farm numbers and CNBC says it is a 'little bit' better.
What is it? It is decent, but it is also likely lagging the economic data
that is sliding lower. Without tax reform, healthcare reform, or some kind
of meaningful reform, the numbers will regress because expectations of
economic increase will temper even more.
Non-Farm Payrolls: 209K vs 175K exp vs 231K June (from 187K)
Averages: 195K jobs last 3 months, 184K/month in 2017
Unemployment Rate: 4.3 vs 4.3 vs 4.4
Wages/earnings: 0.3% vs 0.2%. +2.5% year/year. Same gains as before.
Average Workweek: 34.5 vs 34.5
U-6 (less than full employed though wanting full employment): 8.6% vs 8.6%
Participation: 62.9% vs 62.8%. Workforce +349K, increasing the last 4
months. Some said this was because of increased confidence in the jobs
market. Perhaps, but it also doesn't hurt that the Trump administration
tossed out the Obama changes to what constitutes looking for work in order
to qualify for assistance. No longer is reading the classified ads looking
for work. Nor is bed rest, or taking sick kids to the doctor, signing up
for AA, etc. Looking for work is not actually looking for work, and thus
people must get off the non-working 'work' assistance program.
Employment +345K. Unemployed +4K
The Mix: Where are the jobs and who is getting them?
There is change occurring, and it is without any tax or healthcare reform.
Regulatory reduction and change is helping, one example just being who is
considered looking for work in order to receive assistance.
Structural changes, however, remain and are still occurring as retail has to
adjust on top of all other areas. Retail continues to show weak growth as
retailers shutter stores and try to figure out how to compete with Amazon.
Manufacturing shows solid gains. Those latter are high paying jobs. Some
improvement, but still the same, serious problems.
Part-time: +349K
Full-time: -54K
Food & Beverage (waiters): +53K
Prof/Business services: +49K
Healthcare: +39K
Manufacturing: +16K
Construction: +6K
Retail: +9K
If the job distribution above is not convincing, consider the following
complied by the New York Federal Reserve:
Education distribution of people obtaining jobs growth.
Less than high school education: +0.4% year/year
High School education: +0.9% year/year
College Educated and/or post-graduate degree: -0.2% year/year
This is the year/year trend. The trend lower in college and higher
education has been ongoing.
Consider the following:
The biggest problem according to major tech companies is finding qualified
people to hire. That may or may not be the case (studies show there are
tens of thousands of US educated STEM graduates who cannot find work), but
even if so, look at the jobs per industry distribution above. The economy
is still producing mostly low wage, hourly service jobs and thus most jobs
filled are in those areas.
Just look at the part-time jobs versus fulltime: 349K versus -54K. Even
now we are STILL killing off full-time jobs. The legacy of the ACA
continues as the Senate cowardly fails to act. Hopefully Trump will go
ahead and end insurance subsidies and have the complete failure of the ACA
rapidly come about.
Just look at US Productivity: with so many low-wage, menial jobs dominating
the economy, is there any wonder productivity has collapsed so sharply the
past four years?
Despite more jobs being created, they are the same kind of jobs. The
economy is not morphing into a new small business creating dynamo. Indeed,
we are still killing more businesses than creating, and until the ACA is
repealed as THE major step, then remove most all of the regulations from the
prior 8 years, and then put in meaningful tax reform to get investment in
the US going again (remember, capex is still virtually nonexistent), there
will be no change for most Americans.
Why? The bifurcation in wealth will necessarily continue because the Fed
will have no choice but to continue its low interest rate policies in
attempts to keep the markets afloat -- just as it did after the financial
crisis. No real gains, just inflated financial assets making certain
portions of society wealthier to spend and keep the economy moving. No
money to invest in small businesses to create the next new great jobs, just
keeping the old line of companies alive as well as the few newer companies
that run the communications everyone uses. The result is endless stagnation
and the hope that the debt bubble will not burst.
Greenspan still in denial.
But, according to Allen Greenspan, the Bond bubble is about to burst due to
'abnormally low' rates. Ironic. Greenspan was the main proponent of the
debt-financed economy. Is he now remorseful? No, he still does not
acknowledge his role. He is blaming others for expanding what he started.
That makes perfect sense in our society today: it is always someone else's
fault.
THE MARKET
LEADERSHIP
Tech: Not a bad session. MSFT gapped modestly upside off its test. AAPL
started back up after a brief test of its earnings gap higher. ORCL holds
its 7 week lateral move after gapping upside. Not bad.
Software: Remains solid. DATA adds more upside after its earnings gap.
VMW trying to make the break higher. GLUU continues upside. CALD gapped to
a higher high, faded some but still strong.
Chips: Those that sold back the past 1-2 weeks are trying to set up for a
bounce, e.g. AMAT, LRCX, AMD. SWKS held up longer but then broke and still
dos not look great. XLNX gapped upside Friday, but to a doji below the 10
day EMA on low trade. Not a lot of power. Important group, will see if it
can put in a decent move.
Drugs/biotech: JNJ still solid as is CELG. Large caps okay, small caps
still struggling, e.g. AXGN, IMGN, IMMU.
China stocks: Overall okay but some issues. YY remains strong as does
HTHT, BZUN, SINA, SOHU, BIDU. NTES fell under some pressure. JD looks
great.
Industrials: Large cap industrials were fine. HON continued its run for the
week. CAT bounced off a 10 day EMA test. HOLI, small cap, was not bad with
a bounce off the 20 day EMA.
Financial: WFC dropped hard but closed down just 1%. More fake accounts,
irregularities handling mortgages, and other issues surfaced again. Jerks.
C still edging up the 10 day EMA. BAC jumped off support and scored a nice
gain. JPM gapped but gave back a pretty good part of it. GS put in a solid
break higher on volume.
MARKET STATS
DJ30
Stats: +66.71 points (+0.3%) to close at 22092.81
Nasdaq
Stats: +11.22 points (+0.18%) to close at 6351.56
Volume: 1.9B (-9.95%)
Up Volume: 925.29M (-29.44M)
Down Volume: 960.76M (-159.24M)
A/D and Hi/Lo: Advancers led 1.42 to 1
Previous Session: Decliners led 1.45 to 1
New Highs: 89 (0)
New Lows: 74 (-9)
S&P
Stats: +4.67 points (+0.19%) to close at 2476.83
NYSE Volume: 785M (-5.64%)
A/D and Hi/Lo: Advancers led 1.3 to 1
Previous Session: Decliners led 1.34 to 1
New Highs: 146 (+24)
New Lows: 51 (-19)
SENTIMENT INDICATORS
VIX: 10.03; -0.41
VXN: 14.09; -0.6
VXO: 8.9; +0.44
Put/Call Ratio (CBOE): 1; -0.01. Second straight session over 1.0.
Bulls and Bears: Bully. Bulls were lower but still at 60, the key level for
corrections. Of course the market has fade a week or two, but that is not
the kind of correction I am talking about. A real correction. We will see.
Bulls: 60.0 versus 60.2
Bears: 16.2 versus 16.5
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 60.0 versus 60.2
60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus
50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus
58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5 versus 56.7
versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7
versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1 versus 46.7
versus 45.2
Bears: 16.2 versus 16.5
16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2
versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3
versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3
versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5
versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2
versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3
versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.264% versus 2.221%. Modest drop in bonds on the jobs report. For
so strong, bonds were not surging. TLT is holding the 50 day MA, bouncing
off the low.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.221%
versus 2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus
2.287% versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261%
versus 2.318% versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus
2.375% versus 2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268%
versus 2.20% versus 2.140% versus 2.140% versus 2.148% versus 2.165% versus
2.156% versus 2.191% versus 2.155% versus 2.162% versus 2.209% versus 2.21%
versus 2.21% versus 2.19% versus 2.176% versus 2.14% versus 2.183% versus
2.154% versus 2.21% versus 2.20%
EUR/USD: 1.17738 versus 1.18718. Wow, the dollar actually rose against the
euro. Sold to the 10 day EMA, the support it has held the past 5 weeks on
the rally.
Historical: 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 110.689 versus 109.963. Dollar bouncing after a three week drop.
Historical: 109.963 versus 110.717 versus 110.368 versus 110.28 versus
110.704 versus 111.07 versus 111.166 versus 111.897 versus 111.176 versus
111.128 versus 111.863 versus 111.89 versus 112.096 versus 112.582 versus
112.536 versus 113.314 versus 113.152 versus 113.929 versus 114.063 versus
113.913 versus 113.126 versus 113.253 versus 113.270 versus 112.413 versus
111.993 versus 112.340 versus 112.24 versus 111.943 versus 111.299 versus
111.357 versus 111.278 versus 111.470 versus 111.729 versus 110.873 versus
110.854 versus 109.560 versus 110.060 versus 109.97 versus 110.334 versus
110.299 versus 109.355
Oil: 49.58, +0.55. Still bumping up against the 200 day SMA as oil forms a
weeklong pennant testing the last break higher.
Gold: 1264.60, -9.80. Faded to the 10 day EMA in a 3 session pullback
testing the 3 week run off the May low.
MONDAY
NASDAQ, SP500, SOX are all snuggled against near support after just over a
week of a lateral move or a pullback. Not bad positioning, and there is
still leadership to that could throw in upside and break the indices higher
off support.
At the same time the good earnings news could not do that trick. AAPL
'rescued' the market but the indices sat on support. The jobs report was
solid enough but not too great, and the indices sat on support. They did
not break lower, but good news did not break them higher. Perhaps they were
just ignoring the market, doing what they needed to do. Perhaps.
Regardless of how they got there and why they stayed, those key indices are
at support and in position to rally. Now we see if they do.
The interesting aspect: bulls are at 60 for the second week. In early 2017,
bulls were over 60 for 7 weeks. No serious selloff resulted, an aberration
for the market and this indicator. Oh they tried to sell off, and several
times the indices made moves that historically would market a rollover.
Yet, bids came back in and thwarted the selling pressure and the indices
recovered. Magic. Ready to roll over, rolling over, then caught and
supported.
There is also Jim Paulson who said Friday that we can do all we want
"without aggravating inflation and interest rates." Moreover, he added, "if
that's going to continue, I think the bull market could continue forever."
Forever. Indeed.
Back to the interesting aspect. The other one. Even as bulls move over 60
and we see calls for unending bull markets (as I recall some saying in 1998
just before the Dow crashed), more and more expert money managers call for a
serious market correction. Interactive Brokers raised its margin
requirements on trades on volatility products. Friday another joined in.
BAC's Michael Hartnett, citing a euphoric bull/bear level, said a "little
more meaningful" correction, "not your average correction," is coming in the
fall. Still, he says it is not time to move out of equities just yet.
Whew. So this is not THE pullback that leads to that selloff. Gee, it
seems everyone, EVEN THE BEARS, don't think the correction is nigh. Maybe
they are in the know, but the fact that everyone says it is coming but not
yet means they don't have a clue as to the when. History says when everyone
says it isn't happening is when it happens. The experts rarely hit the nail
on the head. Anyone can say a correction is coming because of any number of
factors. We even say that, but at least we are not so arrogant (stupid?) to
say we know when.
So, very bullish, experts cautious, but not THAT cautious just yet. That
just means beware. The indices are in a position where they could bounce,
they just have to show they can do it. As there are still stocks that are
in position to rally as well, you have to be ready for that to happen.
Have a great weekend.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6351.56
Resistance:
6461 is the June 2017 prior all-time high
Support:
6341.70 is the all-time high from early June.
The 20 day EMA at 6333
6300 is the mid-June interim high
The 50 day EMA at 6252
6205 is the late May all-time high
The 2016 trendline at 6117
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 200 day SMA at 5812
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
S&P 500: Closed at 2476.83
Resistance:
2484 is the upper channel line from the March 2009 uptrend channel
Support:
The 20 day EMA at 2465
2453.46 is the June prior all-time closing high
The 50 day EMA at 2443
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
The 200 day SMA at 2331
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 22,092.81
Resistance:
Support:
The 10 day EMA at 21,887
21,681is the July prior all-time high
The 20 day EMA at 21,746
The 50 day EMA at 21,482
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
The 200 day SMA at 20,388
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
_______________________________________________________
Customer Support: http://www.InvestBilling.com
1153 Bergen Pkwy - Suite I #502 - Evergreen, CO 80439
8/5/2017 Investment House Daily
* * * *
Investment House Daily Subscribers:
MARKET ALERTS:
Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: AAOI; LITE
The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html
********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.
TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4
TO VIEW THE NEWS/ECONOMY OVERVIEW CLICK:
http://investmenthouse1.com/ihmedia/f/eco/eco.mp4
TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4
TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************
The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Jobs report beats, shows some decent improvement (though still not that
great), market goes nowhere. Again.
- Another piece of good news cannot break the indices higher, but they also
don't break lower and remain in position to bounce.
- Jobs market will never change with these policies in place.
- Plenty of bulls, lots of expert bears, but no one saying a correction is
imminent. Does that mean it is?
- Indices in position, good leadership remains as does the Fed. Have to
respect that.
Futures were up a bit before the July Jobs Report. They were up a bit after
the July Jobs Report. By the end of the session the stock indices were up a
bit. DJ30 put in yet another new high. SP500 continued to walk laterally
on the 10 day EMA and just below the 2009 upper channel line. NASDAQ and
SOX show doji over the 50 day EMA. SP400 and RUTX bounced to test the break
below the 50 day MA, below some resistance but still in the ballpark to hold
and resume the upside. In position, they just couldn't make the move even
after a pretty solid jobs report, strong AAPL earnings, and of course, a
continued benevolent Federal Reserve.
SP500 4.67, 0.19%
NASDAQ 11.22, 0.18%
DJ30 66.71, 0.30%
SP400 0.24%
RUTX 0.50%$
SOX 0.06%
NASDAQ 100 0.15%
The close looks better than it was 10 minutes before the close. SOX was
negative, SP500 was flirting with negative -- then a late bid bounced things
to a better finishing look.
VOLUME: NYSE -6%; NASDAQ -10%. Upside session volume failure with both
NYSE and NASDAQ dropping below average. Even with a jobs report. But, it
was a Friday in late summer and volume can be lower.
ADVANCE/DECLINE: NYSE 1.3:1; NASDAQ 1.4:1. About in line with lackluster
gains.
It was a do nothing session in terms of overall movement and in terms of
altering the index patterns of the past 1 to 2 weeks.. Sometimes, however,
doing nothing can be the better option, particularly on a Friday after some
downside weeks.
Specifically, SP500, NASDAQ, and SOX are in very good position to start a
new upside leg. SOX is showing a doji at the 50 day EMA. NASDAQ a doji at
the 20 day EMA as it sits on top of the June prior high. SP500 is still
below its 2009 upper channel line, riding the 10 day EMA. A good
consolidation of the last highs, a nice quiet test.
SP400 and RUTX are not as neat and tidy, but they are at least holding near
the 50 day MA after breaking them Thursday. Not perfect but if the other
indices move up, they will likely follow. Likely. The economic data,
July's Jobs Report notwithstanding, is not good. ISM Services managed to
hold expansion territory, but dropped to the lowest in a year. Services led
the expansion. That puts it more in perspective. Then there are June's
Factory Orders that were all Boeing. Without those planes, orders were
negative. Capex investment was flat. Small and midcaps are domestically
economically sensitive. Thus it is not surprising their patterns have sold
more and harder than the large cap indices.
Leadership remains good enough. AAPL, FB and even NFLX are solid enough.
The financials are hanging in. China stocks ditto. Software had a good
week on some solid earnings. Large drugs and biotechs are good enough.
Large manufacturing, e.g. CAT, HON. After a week or more of selling chips
may be ready to attempt a bounce. It is no surprise the large cap leaders
are in better shape: look at what indices are in better shape.
In sum, the action leaves the non-DJ30 large cap indices in good position to
bounce. Leadership is good enough and after a test others are in position
to rebound. The small and midcaps are weaker but nothing a new general
market bounce cannot overcome.
NEWS/ECONOMY
June Jobs Report beats, is not bad, but it is not great.
The jobs report was stronger than expected across the board: wages, jobs,
participation, and revisions. "A little bit of a pickup" says CNBC's Kelly
Evans, hating the number. Okay, economist Mark Zandi says, after his ADP
report Thursday, the jobs market is in "high gear." The report blows out
anticipated non-farm numbers and CNBC says it is a 'little bit' better.
What is it? It is decent, but it is also likely lagging the economic data
that is sliding lower. Without tax reform, healthcare reform, or some kind
of meaningful reform, the numbers will regress because expectations of
economic increase will temper even more.
Non-Farm Payrolls: 209K vs 175K exp vs 231K June (from 187K)
Averages: 195K jobs last 3 months, 184K/month in 2017
Unemployment Rate: 4.3 vs 4.3 vs 4.4
Wages/earnings: 0.3% vs 0.2%. +2.5% year/year. Same gains as before.
Average Workweek: 34.5 vs 34.5
U-6 (less than full employed though wanting full employment): 8.6% vs 8.6%
Participation: 62.9% vs 62.8%. Workforce +349K, increasing the last 4
months. Some said this was because of increased confidence in the jobs
market. Perhaps, but it also doesn't hurt that the Trump administration
tossed out the Obama changes to what constitutes looking for work in order
to qualify for assistance. No longer is reading the classified ads looking
for work. Nor is bed rest, or taking sick kids to the doctor, signing up
for AA, etc. Looking for work is not actually looking for work, and thus
people must get off the non-working 'work' assistance program.
Employment +345K. Unemployed +4K
The Mix: Where are the jobs and who is getting them?
There is change occurring, and it is without any tax or healthcare reform.
Regulatory reduction and change is helping, one example just being who is
considered looking for work in order to receive assistance.
Structural changes, however, remain and are still occurring as retail has to
adjust on top of all other areas. Retail continues to show weak growth as
retailers shutter stores and try to figure out how to compete with Amazon.
Manufacturing shows solid gains. Those latter are high paying jobs. Some
improvement, but still the same, serious problems.
Part-time: +349K
Full-time: -54K
Food & Beverage (waiters): +53K
Prof/Business services: +49K
Healthcare: +39K
Manufacturing: +16K
Construction: +6K
Retail: +9K
If the job distribution above is not convincing, consider the following
complied by the New York Federal Reserve:
Education distribution of people obtaining jobs growth.
Less than high school education: +0.4% year/year
High School education: +0.9% year/year
College Educated and/or post-graduate degree: -0.2% year/year
This is the year/year trend. The trend lower in college and higher
education has been ongoing.
Consider the following:
The biggest problem according to major tech companies is finding qualified
people to hire. That may or may not be the case (studies show there are
tens of thousands of US educated STEM graduates who cannot find work), but
even if so, look at the jobs per industry distribution above. The economy
is still producing mostly low wage, hourly service jobs and thus most jobs
filled are in those areas.
Just look at the part-time jobs versus fulltime: 349K versus -54K. Even
now we are STILL killing off full-time jobs. The legacy of the ACA
continues as the Senate cowardly fails to act. Hopefully Trump will go
ahead and end insurance subsidies and have the complete failure of the ACA
rapidly come about.
Just look at US Productivity: with so many low-wage, menial jobs dominating
the economy, is there any wonder productivity has collapsed so sharply the
past four years?
Despite more jobs being created, they are the same kind of jobs. The
economy is not morphing into a new small business creating dynamo. Indeed,
we are still killing more businesses than creating, and until the ACA is
repealed as THE major step, then remove most all of the regulations from the
prior 8 years, and then put in meaningful tax reform to get investment in
the US going again (remember, capex is still virtually nonexistent), there
will be no change for most Americans.
Why? The bifurcation in wealth will necessarily continue because the Fed
will have no choice but to continue its low interest rate policies in
attempts to keep the markets afloat -- just as it did after the financial
crisis. No real gains, just inflated financial assets making certain
portions of society wealthier to spend and keep the economy moving. No
money to invest in small businesses to create the next new great jobs, just
keeping the old line of companies alive as well as the few newer companies
that run the communications everyone uses. The result is endless stagnation
and the hope that the debt bubble will not burst.
Greenspan still in denial.
But, according to Allen Greenspan, the Bond bubble is about to burst due to
'abnormally low' rates. Ironic. Greenspan was the main proponent of the
debt-financed economy. Is he now remorseful? No, he still does not
acknowledge his role. He is blaming others for expanding what he started.
That makes perfect sense in our society today: it is always someone else's
fault.
THE MARKET
LEADERSHIP
Tech: Not a bad session. MSFT gapped modestly upside off its test. AAPL
started back up after a brief test of its earnings gap higher. ORCL holds
its 7 week lateral move after gapping upside. Not bad.
Software: Remains solid. DATA adds more upside after its earnings gap.
VMW trying to make the break higher. GLUU continues upside. CALD gapped to
a higher high, faded some but still strong.
Chips: Those that sold back the past 1-2 weeks are trying to set up for a
bounce, e.g. AMAT, LRCX, AMD. SWKS held up longer but then broke and still
dos not look great. XLNX gapped upside Friday, but to a doji below the 10
day EMA on low trade. Not a lot of power. Important group, will see if it
can put in a decent move.
Drugs/biotech: JNJ still solid as is CELG. Large caps okay, small caps
still struggling, e.g. AXGN, IMGN, IMMU.
China stocks: Overall okay but some issues. YY remains strong as does
HTHT, BZUN, SINA, SOHU, BIDU. NTES fell under some pressure. JD looks
great.
Industrials: Large cap industrials were fine. HON continued its run for the
week. CAT bounced off a 10 day EMA test. HOLI, small cap, was not bad with
a bounce off the 20 day EMA.
Financial: WFC dropped hard but closed down just 1%. More fake accounts,
irregularities handling mortgages, and other issues surfaced again. Jerks.
C still edging up the 10 day EMA. BAC jumped off support and scored a nice
gain. JPM gapped but gave back a pretty good part of it. GS put in a solid
break higher on volume.
MARKET STATS
DJ30
Stats: +66.71 points (+0.3%) to close at 22092.81
Nasdaq
Stats: +11.22 points (+0.18%) to close at 6351.56
Volume: 1.9B (-9.95%)
Up Volume: 925.29M (-29.44M)
Down Volume: 960.76M (-159.24M)
A/D and Hi/Lo: Advancers led 1.42 to 1
Previous Session: Decliners led 1.45 to 1
New Highs: 89 (0)
New Lows: 74 (-9)
S&P
Stats: +4.67 points (+0.19%) to close at 2476.83
NYSE Volume: 785M (-5.64%)
A/D and Hi/Lo: Advancers led 1.3 to 1
Previous Session: Decliners led 1.34 to 1
New Highs: 146 (+24)
New Lows: 51 (-19)
SENTIMENT INDICATORS
VIX: 10.03; -0.41
VXN: 14.09; -0.6
VXO: 8.9; +0.44
Put/Call Ratio (CBOE): 1; -0.01. Second straight session over 1.0.
Bulls and Bears: Bully. Bulls were lower but still at 60, the key level for
corrections. Of course the market has fade a week or two, but that is not
the kind of correction I am talking about. A real correction. We will see.
Bulls: 60.0 versus 60.2
Bears: 16.2 versus 16.5
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 60.0 versus 60.2
60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus
50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus
58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5 versus 56.7
versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7
versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1 versus 46.7
versus 45.2
Bears: 16.2 versus 16.5
16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2
versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3
versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3
versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5
versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2
versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3
versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.264% versus 2.221%. Modest drop in bonds on the jobs report. For
so strong, bonds were not surging. TLT is holding the 50 day MA, bouncing
off the low.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.221%
versus 2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus
2.287% versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261%
versus 2.318% versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus
2.375% versus 2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268%
versus 2.20% versus 2.140% versus 2.140% versus 2.148% versus 2.165% versus
2.156% versus 2.191% versus 2.155% versus 2.162% versus 2.209% versus 2.21%
versus 2.21% versus 2.19% versus 2.176% versus 2.14% versus 2.183% versus
2.154% versus 2.21% versus 2.20%
EUR/USD: 1.17738 versus 1.18718. Wow, the dollar actually rose against the
euro. Sold to the 10 day EMA, the support it has held the past 5 weeks on
the rally.
Historical: 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 110.689 versus 109.963. Dollar bouncing after a three week drop.
Historical: 109.963 versus 110.717 versus 110.368 versus 110.28 versus
110.704 versus 111.07 versus 111.166 versus 111.897 versus 111.176 versus
111.128 versus 111.863 versus 111.89 versus 112.096 versus 112.582 versus
112.536 versus 113.314 versus 113.152 versus 113.929 versus 114.063 versus
113.913 versus 113.126 versus 113.253 versus 113.270 versus 112.413 versus
111.993 versus 112.340 versus 112.24 versus 111.943 versus 111.299 versus
111.357 versus 111.278 versus 111.470 versus 111.729 versus 110.873 versus
110.854 versus 109.560 versus 110.060 versus 109.97 versus 110.334 versus
110.299 versus 109.355
Oil: 49.58, +0.55. Still bumping up against the 200 day SMA as oil forms a
weeklong pennant testing the last break higher.
Gold: 1264.60, -9.80. Faded to the 10 day EMA in a 3 session pullback
testing the 3 week run off the May low.
MONDAY
NASDAQ, SP500, SOX are all snuggled against near support after just over a
week of a lateral move or a pullback. Not bad positioning, and there is
still leadership to that could throw in upside and break the indices higher
off support.
At the same time the good earnings news could not do that trick. AAPL
'rescued' the market but the indices sat on support. The jobs report was
solid enough but not too great, and the indices sat on support. They did
not break lower, but good news did not break them higher. Perhaps they were
just ignoring the market, doing what they needed to do. Perhaps.
Regardless of how they got there and why they stayed, those key indices are
at support and in position to rally. Now we see if they do.
The interesting aspect: bulls are at 60 for the second week. In early 2017,
bulls were over 60 for 7 weeks. No serious selloff resulted, an aberration
for the market and this indicator. Oh they tried to sell off, and several
times the indices made moves that historically would market a rollover.
Yet, bids came back in and thwarted the selling pressure and the indices
recovered. Magic. Ready to roll over, rolling over, then caught and
supported.
There is also Jim Paulson who said Friday that we can do all we want
"without aggravating inflation and interest rates." Moreover, he added, "if
that's going to continue, I think the bull market could continue forever."
Forever. Indeed.
Back to the interesting aspect. The other one. Even as bulls move over 60
and we see calls for unending bull markets (as I recall some saying in 1998
just before the Dow crashed), more and more expert money managers call for a
serious market correction. Interactive Brokers raised its margin
requirements on trades on volatility products. Friday another joined in.
BAC's Michael Hartnett, citing a euphoric bull/bear level, said a "little
more meaningful" correction, "not your average correction," is coming in the
fall. Still, he says it is not time to move out of equities just yet.
Whew. So this is not THE pullback that leads to that selloff. Gee, it
seems everyone, EVEN THE BEARS, don't think the correction is nigh. Maybe
they are in the know, but the fact that everyone says it is coming but not
yet means they don't have a clue as to the when. History says when everyone
says it isn't happening is when it happens. The experts rarely hit the nail
on the head. Anyone can say a correction is coming because of any number of
factors. We even say that, but at least we are not so arrogant (stupid?) to
say we know when.
So, very bullish, experts cautious, but not THAT cautious just yet. That
just means beware. The indices are in a position where they could bounce,
they just have to show they can do it. As there are still stocks that are
in position to rally as well, you have to be ready for that to happen.
Have a great weekend.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6351.56
Resistance:
6461 is the June 2017 prior all-time high
Support:
6341.70 is the all-time high from early June.
The 20 day EMA at 6333
6300 is the mid-June interim high
The 50 day EMA at 6252
6205 is the late May all-time high
The 2016 trendline at 6117
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
The 200 day SMA at 5812
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
S&P 500: Closed at 2476.83
Resistance:
2484 is the upper channel line from the March 2009 uptrend channel
Support:
The 20 day EMA at 2465
2453.46 is the June prior all-time closing high
The 50 day EMA at 2443
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
The 200 day SMA at 2331
2322 is the March 2017 low
2319 is the 78% Fibonacci retracement
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 22,092.81
Resistance:
Support:
The 10 day EMA at 21,887
21,681is the July prior all-time high
The 20 day EMA at 21,746
The 50 day EMA at 21,482
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
The 200 day SMA at 20,388
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
End part 1 of 3
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